One day, while the country was engulfed in a cloud of controversy over the issues around Escponent and other investments entities,the country woke up to a picture of South African businessman, Dave Van Niekerk, shaking hands with the Ingwenyama,His Majesty King Mswati III.
Van Niekerk, is a distinguished global fintech leader and entrepreneur,renowned for his transformative impact on financial services across Africa.
This circulating picture was a indeed a shocker, but it proved a few things ;Firstly, Inkhosi yinkhosi yebantfu (The King is king for the people).
Secondly,it qualified the Eswatini customary tradition ‘kumbula ingubo’ (seeking audience with the king).As it is,now is known knowledge that Dave Van Niekerk successfully sought audience with the King in trying to fix the problems surrounding the named financial services in the kingdom.
Consequently,that historic meeting has inevitably yielded good results as the businessman made commitments towards lasting solutions which he has honoured.
Most importantly,when the Ingwenyama (The King)granted the South African Investor the platform to find a solution,the King was obviously giving Dave Van Niekerk a CHANCE.(So who are we to question what the throne has blessed,not unless the ruling power has shifted).
Van Niekerk remarked recently,“I have followed through on that commitment. After my resignation as a non-executive director, I undertook to assist both members and management to ensure that the investments made during my tenure were properly managed out. I was involved as an intermediary and all the investments have been repaid,” Through this statement ,Van Niekerk highlighted that he acted as an intermediary in the recovery of more than E35 million in the Status Capital Building Society (SCBS) case.
Early this week, social media went abuzz following a ‘reckless’ submission made in parliament by former Times of Eswatini journalist,Welcome Siyabonga Dlamini who now represents the people of Mbabane East constituency as a Member of Parly.
In his parly submission,the honourable member outlined that if by chance, Mr Dave Van Niekerk was granted a banking license,he will personally propose or move a mortion of a vote of no confidence to the Minister of Finance,Honourable Neal Rijkenburg.
He also accused the businessman of taking the country for a ride by applying for the license due to his alleged involvement with the Status Capital Building Society,Blue Financial Services and Escponent.
Personally,I have been told by very reliable sources and atleast according to my research that Mr Dave Van Niekerk is a very successful businessman.
My small understanding of business doesn’t allow me to believe that Mr Niekerk would want to invest his hard earned E50 million knowing very well that he would lose it.I base this from knowing that amongst other requirements to be granted a banking license,the Central Bank of Eswatini ;the applying entity must have atleast E50 million. So this gives birth to the thought of the possibility of Van Niekerk risking losing this amount if indeed the allegations made against him are true.To me,the bank license application stamps his pure intentions!!
The state would easily freeze the bank account housing that E50 million to recoup whatever his been accused for.
Again why would Van Niekerk apply for the bank license on his personal account without using a front if he meant any harm or he was indeed taking us or the country or even the King for a ride??
It is clear that,instead of dealing with the real issues, some individuals and organisations, have chosen to distort facts and cast blame on Van Niekerk, perhaps in an attempt to find a convenient scapegoat.
Van Niekerk has repeatedly expressed willingness to assist in recovering the Ecsponent funds as well. What is deeply disturbing, however, is the silence and lack of action from the very state institutions that are mandated to execute the recommendations of the Cliffe Dekker report. The report, after all, cleared van Niekerk of wrongdoing and implicated George Manyere, the same Manyere who, not long after, was seen in Eswatini engaging closely with authorities.
This raises difficult but necessary questions, as to how can Dave van Niekerk be held responsible for the collapse of Ecsponent when he was never a director, officer, or executive of the company? Would it make any sense for someone to deliberately undermine their own business interests, to “vote themselves out” of influence, only to orchestrate the downfall of a company over which they had no control?
Cliffe Dekker Hofmeyr is one of Africa’s largest corporate and commercial law firms, with a track record of 170 years. They are a reputable firm that has consistently been ranked as one of Africa’s number one largest commercial law firms. With more than 350 qualified lawyers and a service capability in 11 different practice areas, and a footprint across the African continent, their lawyers specialize in the full spectrum of services covering their clients’ business legal needs and sizeable influence in Africa’s key financial centers and markets.
Acquiring a banking license in Eswatini as a foreign entity requires incorporation under local law, with applications considered only if the parent company is supervised on a consolidated basis in its home country. Foreigners can establish subsidiaries, and for medium-sized banks, foreign ownership is limited to 90%, requiring at least 10% Eswatini ownership, with a minimum capital requirement of E30 million
The Central Bank of Eswatini (CBE) manages the application process, which also involves approval from the Financial Services Regulatory Authority (FSRC) for certain types of licenses GFSC Global (not the Minister of Finance).
Furthermore and regrettably from the submission made by the honourable Member of Parliament,As part of its current strategy, the Central Bank of Eswatini (CBE) seeks to bring in more banks to Eswatini.
The prospects of on boarding new service providers in the banking sector remain in sharp focus, particularly with the advent of various technological advancements that have changed how people interact with banking institutions. Similarly, the Central Bank is refreshing its policies and regulations relating to the licensing of banks to cast the net wide in attracting qualifying and credible institutions.
Banks play a critical role in advancing Eswatini’s economy by providing essential services as intermediaries. Therefore, it is crucial for the Central Bank of Eswatini to fully exercise its role in bank licensing to potentially create positive impacts on the overall economy.
The CBE is charged with the responsibility and mandate of licensing, supervising and regulating banks so that they are not just business motivated by profit-making but also serve the nation’s broad economic interests. This is because the impact of a bank’s collapse is greater than that of an ordinary company. To undertake the assessment and evaluation of a bank license application, the Bank is guided by the provisions of all applicable and relevant financial services laws in the country. Furthermore, the process must pass the master of international best practice. The Bank has crystalized these applicable standards and processes in the CBE Policy on Licensing of Banking and Financial Institutions No.1 of 2021. The purpose of the Policy is to: establish licensing criteria and conditions to ensure that only sound and prudently managed banks or financial institutions are licensed to operate in Eswatini; provide for the standardization of licensing applications and minimum information requirements for the licensing of a financial institution by the Bank; specify procedures that the Bank shall use to evaluate banking business license applications; outline the application process to guide the applicants; and provide transparency of licensing requirements for financial institutions within Eswatini.
Although commercial banks are the most common in Eswatini, the CBE has a tiered- banking system with various types of banking licenses. The categories of banks that may be licensed in Eswatini cover various types of financial institutions, each tailored to specific business scopes and operational requirements. Here’s a detailed summary example of category A:
Category A: Large Commercial and International Banks
- Description: This category of banking license is issued for banking operations which are either domestically owned or majority foreign-owned subsidiary companies with significant international banking interests. To obtain the commercial banking license, the banking operators are to comply with all the prudential guidelines and regulations issued by CBE on the required level of capital adequacy, liquidity, and cash reserve.
- Start-up Capital: E50 million, which must then be always maintained.
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